Indian Journal of Animal Sciences 90 (3): 383–387, March 2020/Article

Economic potential of AVIKASIL-S technology for estrus synchronization in sheep

VINAYAK NIKAM*, SHIV KUMAR, I T KINGSLY, S J BALAJI, ABIMANYU JHAJHRIA,
RAJ KUMAR and DAVENDRA KUMAR

ICAR-National Institute of Agricultural Economics and Policy Research, New Delhi, Delhi 110 012 India

Received: 4 February 2020; Accepted: 13 March 2020

ABSTRACT
The study captures the economic benefits of AVIKASIL-S, an estrus synchronization technology in sheep using
an economic surplus approach in the Rajasthan state of India. The adoption of technology at the field level was at
a nascent stage. Study simulated scenarios at different adoption rates of technology and discerned that technology
has the economic power to enhance the income of shepherds in the state. To reap the more benefits of technology,
the adoption rate needs to increase. The support of government, private sector, and public-private partnership
models besides entrepreneurs are the channels for wider adoption of technology amongst shepherds.

Keywords: AVIKASIL-S, Estrus synchronization, Sheep, Economic surplus, Rajasthan

Most part of the Rajasthan state comes under the arid
and semi-arid agro-climatic conditions which influence the
cropping pattern and livestock production in the region
(Vining 1990, Indu et al. 2014). In this region, livestock
are often considered to be one of the most important means
to sustain the livelihood of the rural population (Sejain et al.
2014, De et al. 2015). People in this region rear livestock
through a pastoral system, but are constrained by the
problem of low biomass availability, hot climate, high
weather variability and limited water availability making it
difficult to sustain the livestock (De et al. 2015). In such
regions, reproductive efficiency of different breeds of sheep
(75 to 80%) is relatively low (Arora and Garg 1998).
Anestrus is most commonly occurring reproductive
disorder of sheep, causing non-pregnancy in the sheep
which many times leads to slaughtering of animals causing
economic losses to the farmers, mainly because of low
fecundity and longer inter-lambing period (less than 1 lamb/
year) (De et al. 2015). The shepherds face difficulty in
detection of estrus and incur extra time and labour for its
detection. As income to the shepherds mainly comes from
selling of lambs for meat purpose, more number of lambs
per year gives more profit to them. Festival seasonal rhythm
also influences the demand of lambs. Demand for lamb
reaches its peak in months of Ramazan. To fulfil lambs
demand in the market with adequate supply of mature lambs,
with the help of estrus induction and fixed time artificial
insemination techniques in sheep rearing could give better
returns to the shepherds for their economic viability.
ICAR-Central Sheep and Wool Research Institute,
*Corresponding author e-mail: vinayakrnikam@ gmail.com
(ICAR-CSWRI), Avikanagar (Rajasthan) has developed an
estrus synchronization technology called AVIKASIL-S. In
this technology, progesterone impregnated intra-vaginal
sponges are inserted into the vagina of the sheep. This
sponge helps in inducing as well as synchronizing the estrus
among the sheep. After this process, artificial insemination
is done at a time in the herd. Though this technology has
been developed quite earlier but still it is in nascent stage.
Despite having great potential to increase the income of
the shepherds, it was not picked up or commercialized either
by private sector or by government sector to exploit its full
potential. In this backdrop, considering the potential and
worth of the technology, the present study attempts to
compute the expected economic surplus generated by the
technology if adopted by farmers at varying levels.
MATERIALS AND METHODS
Study area: Rajasthan state has 56.8 million livestock
population, of which 14% are the sheep. (Livestock Census
2019). Dairy and animal husbandry forms major source of
income (about 35%) to the small and marginal farmers of
the state. At national level, Rajasthan ranked fourth in sheep
population, accounts for nearly 10% of total sheeps in India
(Livestock Census 2019). For field survey, we purposefully
selected Tonk district of the Rajasthan as all the beneficiaries
of this technology from ICAR-CSWRI are from this district.
The sheep population of Tonk district is 2 lakh (Livestock
Census 2012). In this district, livestock sector forms an
important source of income next to crops for the agricultural
households and gross livestock income forms 4% of
household income (NSSO 2013).
Research design and sampling: A multistage sampling
procedure was followed in selection of respondents. From

83
384 NIKAM ET AL.
Tonk district, 7 villages, viz. Indoli, Ridliya Bujurg,
Chonsla, Soda, Garzeda, Deshma and Pratap Pura from
Malpura block, were selected due to concentration of the
beneficiaries of the technology in these villages. Total 52
adopters of AVIKASIL-S technology along with the 40 non-
adopters were selected. Data about the socioeconomic status
of the farmers, cost in sheep rearing and economic benefits
of the technology were collected from the shepherds using
a well-structured interview schedule. For economic surplus,
secondary data from the institute and government sources
were collected.
Economic surplus approach: Economic surplus
represents difference between monetary value of the unit
consumed and the monetary value of unit produced up to the
equilibrium price and quantity. This is most widely used tool
for evaluating the impact of technology on the economic
welfare of households (Moore et al. 2000, Wander et al. 2004,
Swinton, 2002). This method relies on the principle of
projecting shifts in supply and demand curves based on
changes in yield and input cost due to adoption of technology
(Alston et al. 1995). It measures the cumulative social gains
due to research project/technology, returns on investments
by manoeuvring the change in consumer and producer
surplus through a technological change due to the research.
It can also be used to estimate the net present value (NPV),
internal rate of return (IRR), or benefit-cost ratio (BCR)
(Maredia et al. 2000). This approach takes into account the
reduction in per-unit cost and price responses owing to
research-induced supply shifts and computes the
distributional effects of research benefits (Nikam et al.
2019a).
We assessed the aggregate level of benefits and
distribution of economic benefits of AVIKASIL-S
technology at state level (Rajasthan) using an economic
surplus method. Changes in economic surplus that included
producer and consumer surplus were calculated, then
discounted (at 10%) and totalled over 26 years to provide
estimates of economic benefits of the technology.
Assumption of ‘closed economy’ was maintained as most
of the sheep meat is consumed domestically. The basic
economic surplus model of research benefits is described
by Alston et al. (1995).
In Fig. 1, D represents the demand for the product, a
shift in supply from S0 to S1 represents yield improvement
or reduction in cost after the adoption of the new technology.
The initial equilibrium price and quantity are P0 and Q0; P1
and Q1 represent the after the supply shift. The area beneath
the demand curve and between the two supply curves (TS=
area I0abI1) represents the total (annual) benefit from the
research induced supply shift.
Total surplus is calculated by
'CS = P0 Q0Z(1+0.5Z K) ... (1)
'PS = P0 Q0Z (K–Z) (1+0.5Z K) ... (2)
'TS = 'CS + 'PS =P0 Q0K (1+0.5Z K) ... (3)
where 'CS is change in consumer surplus; 'PS is change
in producer surplus; 'TS is change in total surplus; P0 is
84
[Indian Journal of Animal Sciences 90 (3)
Fig. 1. Economic surplus measurement (Source: Alston,
et al. 1995, pp. 209).
the price before the introduction of mobile app; Q0 is the
pre-research quantity; K is the elasticity of demand
Z = KH/(H + K) ...(4)
K = [E(y)/H – E (c) /l+E(y)] p A (1+ w) ...(5)
where Z is the reduction in price, relative to its initial value,
due to supply shift; s is the absolute value of the elasticity
of demand; H is the elasticity of supply; K is the
proportionate shift down in the supply curve due to the
technology; E(y) is the expected yield change; E(c) is the
expected cost change; p is the probability of research
success; A is the technology adoption rate, and w is the
technology depreciation rate.
Assumptions and value parameters used: Table 1 gives
an overview of basic parameters used in economic surplus
approach. As the technology helps in estrus induction as
well as synchronization, average gain in income was 25%
more compared to control group. Cost-wise, no difference
was observed between treated and non treated sheep except
the cost of sponge. Therefore, an increase in cost for the
technology was considered at 3%. Elasticity of demand and
supply in relation to prices were obtained from past
literature. Kumar et al. (2011) have estimated the demand
elasticity for meat as –0.821. Supply elasticity of meat was
taken as 1 since technology is at demonstration stage only.
With little awareness among the shepherds about the
technology, presently its adoption is less than 1% and
adoption of the technology could not achieve the take-off
stage as described by Rogers (2003). Nikam et al. (2019b)
concluded that after commercialization of technology and/
or ab initio support of government support boosted
penetration of technology and distribution of gains amongst
farmers.
The study projects the economic surplus over the period
of time (for next 10 years) with varying rate of adoption by
the shepherds. Production and price data for sheep meat of
Rajasthan state were obtained from various published
sources of government. Prices were obtained year wise since
1994/kg were brought at real prices using index of
wholesale prices at 2019–20 base year. The production and
March 2020] ECONOMIC POTENTIAL OF AVIKASIL-S TECHNOLOGY FOR ESTRUS SYNCHRONIZATION 385

Table 1. Value parameters used in estimation of economic surplus Table 2. Net present value, internal rate of return and
benefit-cost-ratio of AVIKASIL-S
Parameter Value Source
Year Adoption Change in Research and Net
Increase in yield (%) 25 Own survey rate total surplus extension benefit
Reduction in variable cost (%) –03 Own survey (%) (Lakh `) cost (Lakh `) (Lakh `)
Supply elasticity of meat 01 Review of literature
Demand elasticity of meat –0.821 Kumar et al. (2010) 1 (1994) 0.0000 0 0.253 –0.253
Adoption rate (%) 01 Consultation with 2 (1995) 0.0000 0 0.290 –0.289
various stakeholders
3 (1996) 0.0000 0 0.305 –0.304
Probability of success 50 Expert opinion
4 (1997) 0.0000 0 0.307 –0.306
prices series were extrapolated using regression for the next 5 (1998) 0.0000 0 0.299 –0.298
10 years. Probability of success of the technology ranges 6 (1999) 0.0000 0 0.306 –0.305
from 0 to 1. Considering the risk involved and competition 7 (2000) 0.0000 0 0.308 –0.307
in near future, we considered the probability of success at
8 (2001) 0.0002 0.879 1.40 –0.520
50%. Depreciation factor implies that how soon this
9 (2002) 0.0002 0.824 1.611 –0.787
technology would become depreciate or obsolete.
Mathematically, it can be calculated as one minus the annual 10 (2003) 0.0002 1.249 1.643 –0.394
rate of depreciation. Assumption herein is that in next 10 11 (2004) 0.0002 1.153 1.647 –0.500
years about 10% depreciation of the technology. It is also 12 (2005) 0.0002 1.153 1.648 –0.495
possible that with the increasing scale of technology 13 (2006) 0.0002 1.329 1.648 –0.319
adoption, the quality of the service may deteriorate. 14 (2007) 0.0002 1.333 1.649 –0.316
Historical cost of the research was obtained from the records
15 (2008) 0.0002 1.649 1.649 –0.005
of the Institute. The work for development of technology
16 (2009) 0.0002 1.472 1.649 –0.178
was started in the year 1994–2000 for which research cost
was considered. Since 2001 technology has gone for 17 (2010) 0.0002 1.563 1.650 –0.087
demonstration at the shepherds’ field. Therefore, from 2001 18 (2011) 0.0002 2.591 1.650 0.940
onward extension and development cost was considered. 19 (2012) 0.0002 3.256 1.650 1.605
Discount rate refers to the interest rate used to determine 20 (2013) 0.0002 3.661 1.651 2.009
the present value. As it is time preference concept, we have 21 (2014) 0.0002 4.093 1.651 2.441
used 10% of interest rate to calculate the Net Present Value
22 (2015) 0.0002 4.766 1.653 3.112
in analysis.
23 (2016) 0.0002 5.899 1.653 4.246
RESULTS AND DISCUSSION 24 (2017) 0.0002 6.012 1.656 4.356
Present scenario of low adoption rate: The technology 25 (2018) 0.0002 5.603 1.656 3.946
is developed and standardized as per protocol. The 26 (2019) 0.0009 28.967 1.656 27.312
technology is in demand by various other institutions and 27 (2020) 0.0015 51.311 1.657 49.653
development organizations outside the state. At micro level,
28 (2021) 0.0020 72.636 1.657 70.979
evidences establish credential of the technology but not
29 (2022) 0.0030 113.056 1.658 111.401
adopted at a broader level due to weak financial conditions
and lack of awareness among shepherds, besides poor 30 (2023) 0.0038 149.721 1.658 148.062
government support in dissemination of technology. All 31 (2024) 0.0047 193.151 1.659 191.491
these factors led to poor adoption of technology, which is 32 (2025) 0.0056 239.526 1.660 237.866
less than 1%. The break-even point of the technology could 33 (2026) 0.0065 288.789 1.660 287.129
be achieved even at adoption level of 0.02% in 2011–12. 34 (2027) 0.0074 340.882 1.661 339.221
The technology beyond adoption level of 0.02% of sheep
35 (2028) 0.0083 395.742 1.662 394.080
population would start generating economic surplus in the
36 (2029) 0.0092 453.303 1.662 451.640
society. In the year 2019, at an adoption rate of 0.09%, this
technology would generate net surplus of ` 27.31 lakh. We 37 (2030) 0.0100 508.413 1.663 506.750
also projected the economic benefits till 2030, where at Net present value (NPV) (lakh `) 1,048.59
one per cent level of adoption, this technology would likely Internal rate of return (IRR) (%) 27.00
to generate the net benefit of ` 506.74 lakh, with Internal Producer surplus (lakh `) 56.90
rate of return (IRR) 27% and Net present value of ` 1,048.59 Consumer surplus (lakh `) 69.30
lakh.
Total surplus (lakh `) 126.20
Internal rate of return (IRR) is one of the ways to look at
the potentiality of investment and provides an idea of *Past values adjusted through WPI index with base year 2019;
potential profitability and quick recovery of investment, discount rate of 10%.

85
386 NIKAM ET AL.
Table 3. Sensitivity analysis of estimates for different
adoption rates
Maximum adoption NPV IRR Total surplus
by 2030 (in %) (lakh `) (%) (lakh `)
05 4,645 33 998
10 9,270 37 1,972
20 18,680 40 3,969
30 28,059 42 5,952
which must be more than 30% as benchmark value. In this
case IRR is 27% only at 1% level of adoption. From
financial institutions point of view, to recover quick
investment on technology, there is need to increase the scale
of adoption.
Scenario where either government or private player
takes up the technology: If state government adopts this
technology and distributes it through veterinary dispensary,
adoption rate of the technology would be increased. Other
option is the of private firm signs memorandum of
understanding with the CSWRI to commercialize the
technology, in that case also adoption rate of technology
will increase. We expected maximum adoption of the
technology at 30%. A sensitivity analysis was performed
for a range of values of adoption rate. Table 3 shows the
estimated economic surplus at 5%, 10%, 20% and 30%
adoption rate. With the increase in adoption rate to 5%,
IRR would be 33%, and total gain would be ` 4,645 lakh.
At 30% level of adoption, NPV would be ` 28,059 lakh,
total surplus of ` 5,952 lakh and IRR of 42%. The
economic appraisal parameters of technology decipher that
if efforts are made to increase the adoption of the
technology at larger scale, economic agents of the society
would be benefited a lot.
In conclusion, the present adoption status of technology
is minuscule. There is urgent need to bring awareness
amongst shepherds, policy makers and planners using
different means of dissemination of knowledge. The
awareness of technology would generate more demand. This
could be possible by different channels. Firstly, line
department may take up this technology for wider adoption
using a string of prevailing different government schemes
like Rastriya Kirishi Vikas Yojana and other livestock
related missions. Second, the grassroots entrepreneurs and
others in private sector may take this technology forward
through start-ups and commercialization in public–private
partnership using financial and venture capitals with the
help of Start-up India program. Once the technology covers
a scale, i.e. (1% adoption level) started generating promising
returns and economic surplus. State line department using
pedestals of its existing infrastructure and other
paraphernalia can bring a leap and bound progress in
dissemination, adoption and uptake of technology on larger
areas to realize the scale of economy. Wider dissemination
and adoption over a time horizon would help shepherds to
get enhanced income as well as consumers to get meat at
economic rate.
86
[Indian Journal of Animal Sciences 90 (3)
ACKNOWLEDGEMENT
Authors are thankful to the Director and Scientists of
CSWRI Avikanagar, Rajasthan for providing logistic help
to complete the study.
REFERENCES
Alston J M, Norton G W and Pardey P G. 1995. Science under
scarcity: principles and practice for agricultural research
evaluation and priority setting. Cornell University Press,
Cornell, Ithaca NY.
Arora C L and Garg R C. 1998. Sheep production and breeding
(International Book and Distribution Company, Lucknow).
De Kalyan, Kumar D, Sethi D, Gulyani R and Naqvi S M K.
2015. Estrus synchronization and fixed-time artificial
insemination in sheep under field conditions of a semi-arid
tropical region. Tropical Animal Health Production 47(2): 469–
72.
Indu S, Sejian V and Naqvi S M K. 2014. Impact of simulated
heat stress on growth, physiological adaptability, blood
metabolites and endocrine responses in Malpura ewes under
semi-arid tropical environment. Animal Production Science
55(6): 766–776.
Kumar P, Kumar A, Shinoj P and Raju S S. 2011. Estimation of
demand elasticity for food commodities in India. Agricultural
Economics Research Review 24: 1–14.
Livestock Census. 2012. 19 Livestock Census-2012 All India
Report. Department of Animal Husbandry, Dairying and
Fisheries, Ministry of Agriculture, Government of India, Krishi
Bhawan, New Delhi.
Livestock Census. 2019. 20th Livestock Census-2019. All India
Report. Ministry of Fisheries, Animal Husbandry & Dairying,
Government of India, New Delhi.
Maredia M K, Byerlee D and Anderson J. 2000. Ex-post evaluation
of economic impacts of agricultural research programmes: a
tour of good practice. Paper presented at the Workshop on
The Future of Impact Assessment in CGIAR: Needs,
Constraints, and Options, Standing Panel on Impact
Assessment (SPIA) of the Technical Advisory Committee,
Rome, 3–5 May.
Moore Michael R, Gollehon Noel R and Hellerstein Daniel M.
2000. Estimating producer’s surplus with the censored
regression model: an application to producers affected by
Columbia river basin salmon recovery. Journal of Agricultural
and Resource Economics 25(2): 325–46.
Nikam V, Bisen J, Kingsly I M, Kumar S and Jhajhria A. 2019a.
Economic surplus approach. Quantitative methods for social
sciences. (Eds) Vinayak Nikam, Abimanyu Jhajhria and Suresh
Pal. Published by Director, ICAR-National Institute of
Agricultural Economics and Policy Research, New Delhi.
ISBN number: 978-81-940080-2-6.
Nikam V, Kumar S and Kingsley I T. 2019. Impact of mobile app
using economic surplus method. Indian Journal of Agricultural
Sciences 89(6): 1039–43.
NSSO. 2013. 70th Round, Situation assessment survey of
agricultural households: all India debt and investment & land
and livestock holdings in India (January 2013–December
2013), Ministry of Statistics and Programme Implementation,
Government of India.
Rogers E M. 2003. Diffusion of innovations (5th edn). Free Press,
New York.
Sejian V, Maurya V P and Naqvi S M K. 2010. Adaptability and
March 2020] ECONOMIC POTENTIAL OF AVIKASIL-S TECHNOLOGY FOR ESTRUS SYNCHRONIZATION
growth of Malpura ewes subjected to thermal and nutritional
stress. Tropical Animal Health and Production 42: 1763–70.
Swinton S M. 2002. Integrating sustainability indicators into the
economic surplus approach for NRM impact assessment.
Methods for Assessing the Impacts of Natural Resources
Management Research. A summary of the proceedings of the
ICRISAT-NCAP/ICAR International Workshop. (Eds) B
Shiferaw, H A Freeman, International Crops Research Institute
for the Semi-Arid Tropics (ICRISAT), Patancheru, Hyderabad,
6–7 December.
87
387
Vining K C. 1990. Effects of weather on agricultural crops and
livestock: an overview. International Journal of Environmental
Studies 36(1–2): 27–39.
Wander A E, Magalhaes M C, Vedovoto G L and Martins E C.
2004. Using the economic surplus method to assess economic
impacts of new technologies—Case studies of EMBRAPA,
Rural Poverty Reduction through Research for Development
—Conference on International Agricultural Research
for Development, Deutscher Tropentag, Berlin, 5–7
October.